CONCERNS ABOUT CONTRACTING OFFICER’S
TECHNICAL REPRESENTATIVES THAT ARE RELEVANT TO THE AMERICAN RECOVERY AND
REINVESTMENT ACT OF 2009 PROCUREMENTS

Issued on July 23, 2010

Highlights

Highlights of
Report Number:2010-11-087 to the
Internal Revenue Service Deputy Commissioner forOperations Support.

IMPACT ON TAXPAYERS

The Contracting Officer’s
Technical Representatives (COTR) workforce is a key internal control to ensure
that contractors are meeting the Federal Government’s interest in terms of
providing deliverables that are of high quality, complete, timely, and cost
effective.TIGTA identified weaknesses
in COTR contract administration, reported in a prior TIGTA audit report, that
may present a risk to American Recovery and Reinvestment Act of 2009 (Recovery
Act) procurements.If the IRS’ contract
administration is not operating effectively, the IRS cannot ensure that
payments are made only to contractors who perform in accordance with contract
terms and conditions and that Recovery Act funds are not being misspent.

WHY TIGTA DID THE AUDIT

The
Office of Management and Budget supplemental guidance for the Recovery Act
requires that Federal agencies have sufficient qualified staff available for
monitoring performance to mitigate risks when other than firm fixed-price
contract types are proposed.Another
guideline requires Federal agencies to evaluate acquisition workforce needs to
appoint qualified personnel with certification levels appropriate to the
complexity of Recovery Act projects.The
overall objective of this audit was to report observations identified regarding
the contract administration issues cited in a prior TIGTA report that present a
risk for procurements funded under the Recovery Act.

WHAT
TIGTA FOUND

IRS procurements funded by the Recovery Act may be at
risk of not being performed in accordance with the terms and conditions of the
contracts and within the cost and schedule requirements.Our prior audit concluded that COTRs were not
performing the day-to-day contract oversight or the actual physical receipt and
acceptance of contract deliverables for the procurements to which they were
assigned.Instead, these COTRs limited
their involvement to administrative functionsand relied on program
office employees to determine whether the goods or services provided by the
contractor were acceptable.However,
these program office employees were never formally delegated COTR authority by
the responsible Contracting Officer and had not received training to perform
their contract administration roles.

While IRS management has implemented some of the corrective
actions they planned as a result of our findings, a number of those corrective
actions are not scheduled to be implemented until December 2010.Until these corrective actions are
implemented to strengthen contract administration, IRS Recovery Act
procurements are at risk that goods and services received are not in compliance
with the terms and conditions of the contracts or within the cost and schedule
requirements.

WHAT TIGTA RECOMMENDED

TIGTA made no recommendations in this report.However, key IRS management officials
reviewed it prior to issuance and agreed with the facts and conclusions
presented.